Description
This assignment is for a nonprofit financial analysis of the Ronald McDonald House Charities:RMHC South Florida | RMHC South Florida: WelcomeAfter ratio calculation, summarize the results. In particular, you should:Try to identify any patterns and explain whether it is a good or concerning pattern. For instance, you might say that the organization’s daily cash on hand in 2021 was only 20 days, representing a 5-day reduction compared to 2020, which worsens the organization’s financial resilience in case of a crisis. See attached ratio calculations of the organizations finance.
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IMPACT
2
22
South Florida
Keeping Families Close
IMPACT
2
22
Stronger Together
These past two years have been like no other. Yet clearer than ever is the essential role of
the Ronald McDonald House Charities of South Florida in relieving the burdens
experienced by families with critically ill children. Every day, the families we serve worry
about giving their child the best chance to survive. Imagine the added strain of keeping
your family together in a city far from home during the pandemic. Last year, our
community of supporters provided our families with a guiding light, hope, and resources.
As we look forward to 2023 and back to normalcy, we are hoping to start planning the
groundbreaking of our new House so that we may provide these families with a private
refuge where they may renew their strength and spirits while staying just minutes from
their child’s side. Our financial position remains solid, please visit our website for full
audited financials.
We have emerged from the COVID-19 crisis, and I know there is nothing we can’t
accomplish for families when we stick together. We truly are stronger together, we are
resilient, and we will maintain our steady focus on doing what is right for our charity and
the children and families we serve in the long term. Thank you for being part of “The
House that Love Built.”
With gratitude,
Soraya Rivera-Moya and the entire RMHC Team.
South Florida
2 22
DATA
iN NUMBERS
5
Top
Florida
Counties
Lee
Duval
Palm beach
Orange
Monroe
Top medical
conditions
• Transplant
• Cancer
• Premature Birth
• Cardiology
w w w. r m h c s o u t h fl o r i d a . o r g
2 22
DATA
iN NUMBERS
5
Top
U.S. STATES
Florida
Virgin Islands
Ohio
South Carolina
Texas
Top
hospitals
Hawaii
• Holtz Children’s Hospital
• Bascom Palmer Eye Institute
• University of Miami/ Sylvester Cancer Center
• Nicklaus Children’s Hospital
w w w. r m h c s o u t h fl o r i d a . o r g
5
2 22
DATA
Top
Countries
iN NUMBERS
• USA
• Trinidad
• Bahamas
• Jamaica
• Cayman Islands
RUSSIA
SWEDEN
SWITZERLAND
PORTUGAL
GREECE
ISRAEL
INDIA
ST. LUCIA
CURACAO
VENEZUELA
ECUADOR
PARAGUAY
URUGUAY
w w w. r m h c s o u t h fl o r i d a . o r g
Average
length of
stay
28
Number of
family nights
lodging
5,472
Longest stay
How many nights
359
nights
Total number of
families
served
197
South Florida
Number of
volunteers
853
Volunteer
hours
in Activities
14,786
Number of
Adopt a
meals
South Florida
401
Value of those
$
meals
135,673.13
Total value of
in-kind products
and services
312,232
$
received
Number of
savings
provided to families
in meal costs
168,420
$
South Florida
RMHC
FINANCIALS
2 22
Total
Public
Support &
Revenues
$
886,542
1,283,891
$
EXPENSES
$
886,542
Management and general
$
236,592
Fund-raising
$
48,482
TOTAL EXPENSES
$
1,283,891
48,482
$
$
236,592
Program services
w w w. r m h c s o u t h fl o r i d a . o r g
“Words can not express how
thankful we are for the House
and the amazing staff. We will
forever be grateful from the
bottom of our hears. Thank
you for your hospitality and to
tell you how much it meant to
me and my family.”
The Harnanan Family
.
u
o
y
thank
Your contributions
make a difference.
South Florida
IMPACT
2
22
South Florida
rmhcsouthflorida
@rmhcsfl
@rmhcsfl
@rmhcsfl
Ronald McDonald House Charities® of South Florida
1145 N.W. 14th Terrace
Miami, FL 33136
305-324-5683 . info@rmhcsouthflorida.org
w w w. r m h c s o u t h fl o r i d a . o r g
Ronald McDonald House Charities of
South Florida, Inc.
Financial Statements
Years Ended December 31, 2022 and 2021
The report accompanying these financial statements was issued by BDO USA,
P.A., a Delaware professional service corporation, and the U.S. member of
BDO International Limited, a UK company limited by guarantee.
Ronald McDonald House Charities of South Florida, Inc.
Financial Statements
Years Ended December 31, 2022 and 2021
Ronald McDonald House Charities of South Florida, Inc.
Contents
Independent Auditor’s Report
3-4
Financial Statements
Statements of Financial Position
as of December 31, 2022 and 2021
6
Statements of Activities
for the Years Ended December 31, 2022 and 2021
7
Statements of Functional Expenses
for the Years Ended December 31, 2022 and 2021
8
Statements of Cash Flows
for the Years Ended December 31, 2022 and 2021
9
Notes to Financial Statements
for the Years Ended December 31, 2022 and 2021
10 – 25
2
Tel: 305-381-8000
Fax: 305-374-1135
www.bdo.com
100 SE 2nd Street
Miami Tower – 17th Floor
Miami, FL 33131
Independent Auditor’s Report
To the Board of Directors
Ronald McDonald House Charities of South Florida, Inc.
Miami, Florida
Opinion
We have audited the accompanying financial statements of Ronald McDonald House Charities of
South Florida, Inc., the (“Organization”) (a non-profit organization), which comprise the
statements of financial position as of December 31, 2022 and 2021, and the related statements
of activities, functional expenses and cash flows for the years then ended, and the related notes
to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Organization as of December 31, 2022 and 2021, and the change in its
net assets and its cash flows for the years then ended in accordance with accounting principles
generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United
States of America (GAAS). Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Organization and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audits. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the
Organization’s ability to continue as a going concern within one year after the date that the
financial statements are issued or available to be issued.
BDO USA, P.A., a Delaware professional service corporation, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part
of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
3
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with GAAS will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
In performing an audit in accordance with GAAS, we:
•
•
•
•
•
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Organization’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the Organization’s ability to continue as a
going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Miami, FL
August 11, 2023
4
Financial Statements
Ronald McDonald House Charities of South Florida, Inc.
Statements of Financial Position
2021
2022
December 31,
Assets
Current Assets
Cash and cash equivalents
Accounts receivable – RMHC Global
Accounts receivable – Other
Pledges receivable – Current
Prepaid expenses
$
6,898,251
77,559
681,261
1,093,509
20,322
$
5,128,642
91,083
73,255
23,869
Total Current Assets
8,770,902
5,316,849
Deposits
Pledges receivable, net – Long-term
Investments
Property and equipment, net
5,194
853,595
4,479,155
820,218
5,194
4,585,821
759,399
Total Assets
$
14,929,064
$
10,667,263
$
136,185
49,730
$
148,627
–
Liabilities and Net Assets
Current Liabilities
Accounts payable, accrued expenses and other liabilities
Deferred revenue
185,915
148,627
6,000,000
6,000,000
1,126,760
1,328,528
Total Net Assets without Donor Restrictions
7,126,760
7,328,528
With donor restrictions
7,616,389
3,190,108
Total Net Assets
14,743,149
10,518,636
Total Liabilities
Net Assets
Without donor restrictions:
Board designated for house expansion
Undesignated
Total Liabilities and Net Assets
$
14,929,064
$
10,667,263
The accompanying notes are an integral part of these financial statements.
6
Ronald McDonald House Charities of South Florida, Inc.
Statements of Activities
2021
2022
Years ended December 31,
Without Donor
Restrictions
With Donor
Restrictions
Without Donor
Restrictions
Total
2022
With Donor
Restrictions
Total
2021
Public Support and Revenues
Gross proceeds from special events (net of direct
benefit costs of $63,817 and $213,018 for 2022
and 2021, respectively)
$
126,296
$
–
$
126,296
$
150,022
$
72,490
$
222,512
1,020,021
21,503
770,595
(77,477)
17,998
4,501,023
8,343
–
5,521,044
21,503
770,595
(69,134)
17,998
797,929
16,889
733,733
(4,046)
281,276
5,358
358,446
437,604
–
1,156,375
16,889
733,733
(4,046)
718,880
5,358
1,878,936
4,509,366
6,388,302
1,981,161
868,540
2,849,701
Net assets released from restrictions
83,085
(83,085)
451,098
(451,098)
Total Public Support and Revenues
1,962,021
4,426,281
6,388,302
2,432,259
417,442
2,849,701
Donations
Guest donations
Contributions of nonfinancial assets
Loss on disposal of property and equipment
Investment (loss) return, net
Other
–
–
Expenses
1,582,766
223,418
357,605
–
1,582,766
223,418
357,605
1,005,233
248,656
437,969
–
1,005,233
248,656
437,969
Total Expenses
2,163,789
–
2,163,789
1,691,858
–
1,691,858
Change in Net Assets
(201,768)
4,426,281
4,224,513
740,401
417,442
1,157,843
Net Assets, beginning of year
7,328,528
3,190,108
10,518,636
6,588,127
2,772,666
9,360,793
Program services
Management and general
Fundraising
Net Assets, end of year
$
7,126,760
$
7,616,389
$
14,743,149
$
7,328,528
$
3,190,108
$
10,518,636
The accompanying notes are an integral part of these financial statements.
7
Ronald McDonald House Charities of South Florida, Inc.
Statements of Functional Expenses
Years ended December 31,
2022
2021
Management
Program Services
Salaries and related expenses
$
336,121
Management
and General
$
46,653
Fundraising
$
194,578
Total
$
577,352
Program Services
$
260,170
and General
$
Fundraising
Total
36,111
$ 150,610
$ 446,891
Rent expense (including in-kind of $173,398 and
$87,144 for 2022 and 2021, respectively)
168,476
1,737
3,474
173,687
90,417
654
2,178
93,249
Repairs and maintenance (including in-kind of
$23,506 and $28,855 for 2022 and 2021, respectively)
232,875
5,482
3,580
241,937
142,031
3,699
2,219
147,949
Insurance
45,197
507
304
46,008
31,720
698
419
32,837
Utilities (including in-kind of $1,980 for 2022 and 2021)
56,526
1,420
852
58,798
46,260
1,204
723
48,187
Travel and entertainment fees
7,972
12,320
–
20,292
3,582
6,080
–
9,662
Supplies (including in-kind of $296,755 and $229,906
for 2022 and 2021, respectively)
328,262
–
–
328,262
235,314
–
–
235,314
Office expense
35,914
2,870
–
38,784
32,885
4,260
–
37,145
275,289
917
48,735
324,941
205,517
40,383
100,677
346,577
Advertising and promotion (including in-kind of
$226,745 and $211,300 for 2022 and 2021,
respectively)
Professional fees (including in-kind of $48,211 and
–
129,630
102,000
231,630
–
142,831
17,000
159,831
Chapter grants
$65,235 for 2022 and 2021, respectively)
47,760
–
–
47,760
50,000
–
–
50,000
Miscellaneous
6,314
20,244
3,425
29,983
7,353
8,661
5,492
21,506
1,540,706
221,780
356,948
2,119,434
1,105,249
244,581
279,318
1,629,148
42,060
1,638
657
44,355
57,733
4,075
902
62,710
248,656
$ 280,220
$ 1,691,858
Total Expenses before Depreciation
Depreciation and amortization
Total Expenses
$
1,582,766
$
223,418
$
357,605
$
2,163,789
$
1,162,982
$
The accompanying notes are an integral part of these financial statements.
8
Ronald McDonald House Charities of South Florida, Inc.
Statements of Cash Flows
2021
2022
Years ended December 31,
Cash Flows from Operating Activities:
Change in net assets
Adjustments to reconcile change in net assets to
net cash (used in) provided by operating activities:
Depreciation
Loss on disposal of property and equipment
Unrealized loss (gain) on investments
Discount on pledges receivable
In-kind donation of property and equipment
Donor restricted contributions for capital campaign
Changes in operating assets and liabilities:
Accounts receivable (RMHC – Global and Other)
Pledges receivable
Prepaid expenses and other assets
Grants payable
Accounts payable, accrued expenses and other liabilities
Deferred revenue
$
4,224,513
$
1,157,843
44,355
224,456
70,750
(2,251,306)
62,710
4,046
(624,486)
(43,607)
(318,305)
(594,482)
(2,017,854)
3,547
(12,442)
49,730
229,860
27,426
(25,000)
40,667
–
(4,483,246)
(646,689)
Net Cash (Used in) Provided by Operating Activities
(258,733)
511,154
Cash Flows from Investing Activities:
Purchases of property and equipment
Purchases of investments
(105,174)
(117,790)
(405,964)
(93,441)
Net Cash Used in Investing Activities
(222,964)
(499,405)
Cash Flows from Financing Activities:
Collections for capital campaign
2,251,306
318,305
Net Cash Provided By Financing Activities
2,251,306
318,305
Net Increase in Cash and Cash Equivalents
1,769,609
330,054
Cash and Cash Equivalents, beginning of year
5,128,642
4,798,588
Total Adjustments
Cash and Cash Equivalents, end of year
$
6,898,251
$
5,128,642
$
43,607
Supplemental Disclosure of Cash Flow Information:
Non-Cash Operating Transactions:
In-kind contributions of property and equipment
$
–
The accompanying notes are an integral part of these financial statements.
9
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
1. Nature and Purpose of the Organization
Ronald McDonald House Charities of South Florida, Inc. (the “Organization”) is a not-for-profit
corporation chartered in the State of Florida. The Organization is comprised of two divisions: Ronald
McDonald House – Miami Division and RMHC Division. The Ronald McDonald Houses provide
temporary residential facilities to the families of seriously ill children receiving medical treatment
at nearby hospitals. The Miami Division property is located on the grounds of the Jackson Memorial
Medical Center in Miami, Florida. The RMHC Division provides grants to other local and national
charities benefiting children. The Organization is a chapter Organization of the global Ronald
McDonald House Charities (“RMHC Global”), a not-for-profit Organization located in Chicago,
Illinois.
In 2019, the Board of Directors of the Organization elected to move forward with plans to construct
a new residential facility for the Miami Division. As of December 31, 2022, the Organization
continues to occupy the existing facility in Miami, Florida, and continues to raise funds for and plan
the construction of the new facility. The new facility will also be constructed on the grounds of the
Jackson Memorial Hospital.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Organization have been prepared on the accrual basis of accounting
in accordance with accounting principles generally accepted in the United States of America (U.S.
GAAP).
Financial Statement Presentation
Net assets and revenues, gains and losses are classified into two classes of net assets based on the
existence or absence of donor-imposed restrictions. The two classes of net asset categories are as
follows:
Net assets without donor restrictions – net assets that are not subject to donor-imposed restrictions
or laws and may be expended for any purpose in performing the primary objectives of the
Organization. The governing board has designated, from net assets without donor restrictions,
$6,000,000 in net assets for the new residential facility in Miami as of December 31, 2022 and 2021.
Net assets with donor restrictions – net assets subject to stipulations imposed by donors and
grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions
of the Organization or by the passage of time. Other donor restrictions are perpetual in nature,
where the donor has stipulated the funds be maintained in perpetuity. Donor restricted
contributions are reported as increases in net assets with donor restrictions. When a restriction
expires, net assets are reclassified from net assets with donor restrictions to net assets without
donor restrictions in the statements of activities.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect certain reported amounts in the financial statements
and accompanying notes. Accordingly, actual results could differ from those estimates.
10
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
Cash and Cash Equivalents
Cash and cash equivalents include checking, savings, and money market mutual funds and are
maintained at several financial institutions. The Organization may be subject to credit risk on its
cash and cash equivalents, which are placed with high credit-quality financial institutions. At times,
cash deposits may be in excess of the Federal Deposit Insurance Corporation’s insured limits. Money
market fund accounts held at SIPC insured brokerage firms are insured up to $500,000. The money
market funds are reported as “Cash and cash equivalents” in the accompanying statements of
financial position.
Accounts Receivable
Accounts receivable are recorded for contributions earned during the year, but collected after year
end. Accounts receivable are stated at estimated realizable value. An allowance for doubtful
accounts is based on an analysis of expected collection rates determined from experience. Account
balances are charged off against the allowance after all means of collection have been exhausted
and the potential for recovery is considered remote. Management determined that no allowance for
doubtful accounts was considered necessary as of December 31, 2022 and 2021. Accounts receivable
are expected to be collected within twelve months.
Pledges Receivable
Unconditional promises to give (pledges receivable) that are to be collected within one year are
recorded at net realizable value. Unconditional promises to give that are expected to be collected
in future years are initially recorded at the present value of estimated future cash flows. The
discounts on those amounts are computed using risk-free interest rates applicable to the years in
which the promises are received. The interest rate used in computing the discount of the estimated
future cash flows is approximately 4%. The discount will be recognized as contribution revenue in
future years as the discount is amortized over the duration of the contributions. Conditional
promises to give are recognized when the conditions on which they depend are substantially met.
There were no conditional promises to give as of December 31, 2022 and 2021. Management provides
for probable uncollectible pledges through a provision for bad debt expense and an adjustment to
the allowance based on its assessment of the current status of individual pledges receivable. Pledges
receivable are charged off against the allowance after all means of collection have been exhausted
and the potential for recovery is considered remote. Pledges receivable at December 31, 2022 are
restricted for the capital campaign. As of December 31, 2022, management determined that no
allowance for doubtful accounts was considered necessary. Three donors accounted for 59% of
pledges receivable at December 31, 2022.
Investments
Investments are measured at fair value in the statements of financial position. Investment income
(including realized and unrealized gains and losses on investments, interest and dividends) are
included in the statements of activities as increases or decreases in net assets without donor
restrictions unless the income or loss is restricted by donor or law.
The Organization has investments in equity securities and mutual funds that are exposed to various
risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the near term could materially
11
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
affect the statements of activities. To minimize risks, the Organization monitors these investments
and the associated risks on a regular basis.
Property and Equipment, Net
Buildings, building improvements and equipment are recorded at cost, if purchased, or at fair value
at the time of donation, if contributed. They are depreciated on the straight-line method over their
estimated useful lives ranging from 3 to 39 years. Major replacements and betterments of buildings,
building improvements and equipment are capitalized while repairs and minor replacements are
charged to operations.
Contributed property is recorded at its estimated fair market value at the date of the contribution.
These contributions are reported as support without donor restrictions unless the donor has
restricted the donated asset to a specific purpose. Assets donated with explicit restrictions
regarding their use and contributions of cash that must be used to acquire property and equipment
are reported as support with donor restrictions. Absent donor stipulations regarding how long those
donated assets must be maintained, the Organization reports expirations of donor restrictions when
the donated or acquired assets are placed in service as instructed by the donor. The Organization
reclassifies net assets with donor restrictions to net assets without donor restrictions at that time.
Construction in Progress
Construction in progress is stated at cost and not depreciated. The construction in progress will be
transferred to building and building improvements upon completion. Depreciation for construction
in progress will begin upon completion of the project, at which time the building will be placed into
service.
Impairment of Long-Lived Assets
The Organization reviews the carrying value of buildings, building improvements and equipment for
impairment whenever events and circumstances indicate that the carrying value of an asset may
not be recoverable. In cases where the carrying value is not expected to be recoverable, an
impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value
of assets. The factors considered by management in performing this assessment include current
operating results and prospects, as well as the effects of obsolescence and other economic factors.
Deferred Revenue
Deferred revenue consists of contributions received from donors for special events taking place in
the following year.
Functional Expenses
Functional expenses are those expenses incurred by the Organization in the accomplishment of their
mission. The statements of functional expenses present expenses by function and natural
classification. Expenses that can be directly identified with the program or supporting service are
reported as expenses of those functional areas. Other expenses are allocated among program and
supporting services based on a reasonable basis that is consistently applied. The expenses that are
allocated include: depreciation and amortization, insurance, repairs and maintenance, rent, and
utilities, which are allocated on a square footage basis; salaries and related expenses are allocated
on the basis of estimates of time and effort.
12
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
Advertising
The Organization expenses advertising costs as they are incurred.
Revenue Recognition – Donations
Transfers of cash or other assets or settlement of liabilities that are both voluntary and
nonreciprocal are recognized as donations in the accompanying financial statements. In accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2018-08,
donations are also referred to as “Contributions.” Contributions may either be conditional or
unconditional. A contribution is considered conditional when the donor imposes both a barrier and
a right of return. Conditional contributions are recognized as revenue on the date all donor-imposed
barriers are overcome or explicitly waived by the donor. Barriers may include specific and
measurable outcomes, limitations on the performance of an activity and other stipulations related
to the contribution. A donor has a right of return of any assets transferred or a right of release of
its obligation to transfer any assets in the event the Organization fails to overcome one or more
barriers. Assets received before the barrier is overcome are accounted for as refundable advances.
Unconditional contributions may or may not be subject to donor-imposed restrictions. Donorimposed restrictions limit the use of the donated assets but are less specific than donor-imposed
conditions. Contributions received and unconditional promises to give are measured at their fair
values and are reported as an increase in net assets. The Organization reports gifts of cash and other
assets as net assets with donor restrictions if they are received with donor stipulations about the
use of the donated assets, or if they are designated as support for future periods.
When a donor restriction expires, that is, when a stipulated time restriction ends or purpose
restriction is accomplished, net assets with donor restrictions are reclassified to net assets without
donor restrictions and reported in the Statements of Activities as “Net assets released from
restrictions.” Donor-restricted contributions whose restrictions are met in the same reporting period
in which received are reported as net assets without donor restrictions.
Revenue Recognition – Exchange Transactions
Reciprocal transfers in which each party receives and sacrifices goods or services with approximate
commensurate value are recognized as exchange transactions. The core principle is that an entity
should recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. To achieve that core principle, an entity should apply the following steps:
(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract,
(iii) determine the transaction price, (iv) allocate the transaction price to the performance
obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance
obligation.
The Organization applies Topic 606 to exchange transactions in which it receives consideration from
individuals for special events. Under U.S. GAAP, these arrangements are exchange transactions
between the Organization and the individuals. The portion of ticket sales for special events that
relates to the commensurate value the attendee receives in return is recognized when the related
events are held, and performance obligations are met. Performance obligations are met at a point
in time when the events take place.
13
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
Contributed Services, Materials and Other
A substantial number of unpaid volunteers have made significant contributions of their time in the
Organization’s program services and in its fundraising activities. No amounts have been recognized
in the statements of activities because the criterion for recognition has not been satisfied.
The Organization receives donations of advertising materials and food, paper products, cleaning
products, and other miscellaneous supplies for use by the Ronald McDonald House residents. The
Organization also receives donated promotional items, auction items, and other materials and
services for various fundraising events. Donated materials are recorded as revenue and expense in
the accompanying statements of activities at fair market value on the date of receipt. Donated
services are recognized as contributions if the services (a) create or enhance nonfinancial assets or
(b) require specialized skills, are performed by people with those skills, and would otherwise be
purchased by the Organization. See Note 8.
As further discussed in Note 11, the Organization leases the land where the existing Miami House
was built for $1 per year. The Organization records the donated use of land at fair value. See Note
8.
Income Taxes
The Organization is exempt from federal income taxes under Section 501(c)(3) of the Internal
Revenue Code (the “Code”) as a charitable organization whereby only unrelated business income,
as defined by Section 509(a)(1) of the Code, is subject to federal income tax. The Organization
currently has no unrelated business income. Accordingly, no provision for income taxes has been
recorded as of December 31, 2022 and 2021.
The Organization recognizes and measures tax positions based on their technical merit and assesses
the likelihood that the positions will be sustained upon examination based on the facts,
circumstances and information available at the end of each period. Interest and penalties on tax
liabilities, if any, would be recorded in interest expense and other non-interest expense,
respectively. No uncertain tax positions were identified by the Organization as of December 31,
2022 and 2021.
The U.S. federal jurisdiction is the major tax jurisdiction where the Organization files income tax
returns. The Organization is generally no longer subject to U.S. Federal or State examinations by
tax authorities for fiscal years before 2019.
Reclassifications
The Organization is presenting its 2022 financial statements using a classified statement of financial
position. The prior year statement of financial position was not classified. The statements of
activities presentation was modified in 2022 resulting in the combination of direct benefit costs and
gross proceeds from special events, and the breakout of contributions of nonfinancial assets due to
the adoption of Accounting Standard Update (ASU) 2020-07.
14
Ronald McDonald House Charities of South Florida, Inc.
Notes to Financial Statements
Adopted Accounting Pronouncements
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